False Breakouts Show the Direction

Markets move in a sideways trend waiting for today’s FOMC. Even with that, we can still spot few interesting trading occasions on the charts.

First, we will start with the USDCHF where we do have a false breakout of the down trendline and the 38,2% Fibonacci resistance. What is more, the price recently created a bearish hammer on a daily chart. All that is negative for the price and our view of this instrument is bearish.

Next instrument with the false breakout is the WTI Oil where the movement in the opposite direction to the breakout is already advanced. The price tried the Head and Shoulder pattern but failed to go lower so now, buyers took the control over and are playing scenario with the flag as a trend continuation pattern.

Last is GBPUSD, where we still have a buy signal even despite the today’s drop. Recent decline can be considered only as a small correction (flag) of the upswing which broke the down trendline and the horizontal resistance on the 1.316. As long as we are above this level, the sentiment is positive.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis